How Shipa Drives Business Forward
We sit down with Borhene Ben Mena, CEO Shipa Delivery, to talk about the challenges in the market, the solutions and how technology is an integral part of logistics
Tell us about Shipa and your journey with Agility.
Shipa helps businesses, startups, and consumers manage their supply chains online. Our story begins in 2015 when we were investing in start-ups across the globe. We were looking into companies related to logistics and eCommerce. As we dug deeper, we kept hearing how eCommerce was stable but the logistics behind it, especially delivery, was a major issue.
While there have been traditional players in the market, the region battles with ePayments. Customers have preferred cash on delivery and international players didn’t want to play in that game. We were left with just one or two companies—which and that didn’t offer much flexibility to eCommerce platforms.
The industry was in a dire need for of new players in the market and that’s when we launched Shipa. The genesis was to really to build a technology platform with enough capacity in the market to match demand and supply. We started the platform to make it easy to move goods. Initially, we started small - moving goods between towns and cities, and then between countries in the Middle East. Technology takes center stage of in our business as eCommerce is tech driven. So, we had to create a player that spoke the same language and the same culture.
Shipa Delivery is a vision of this digital reality that makes it easy to move stuff with just three clicks and is user-friendly, quick, and simple. The idea is to try and do something like eCommerce for the physical part of what’s behind the digital part of the business.
Basically, we created all these tools and interfaces to make it easy for merchants to get onboarded on the platform, upload their orders, and off they go into our network. On the other side of the platform, we have the consumer who wants flexibility and visibility on what’s happening with their goods. We give both the parties all of that directly on this platform.
What makes your offering a unique proposition in the market?
The differentiator is the delivery of our service. It really goes down to performance and experience. If we do a parallel with eCommerce, what makes an eCommerce business successful? It’s usually that front-end experience and the back-end execution. It’s not that different in our industry, we give our merchants that front-end experience with a dashboard that displays all the information as well as the experience—which is the execution behind it.
We take ownership of the delivery process and ensure our clients’ customers are satisfied with the service provides. For last-mile deliveries we have a hybrid model where we have capacity committed to us and for additional capacity, especially during peak periods, we get it from the market. This ensures we never under-deliver while still staying profitable.
In the past five years how much has the last-mile sector evolved?
A lot has changed. When we began our business five years back the norm was to deliver products in two to three days.
Today, that doesn’t work. We’re now focused on delivering products within a 12 to 24-hour period. People want faster deliveries and two to three days doesn’t cut it anymore. Additionally, there is a large variety of goods that are being shopped online today. Electronics were 60% of the items we delivered, and the rest were fashion and apparel items. This has undergone a tremendous change. Today, we’re delivering a wider product range from groceries to medicines and everyday home items. Consumer buying patterns have changed completely in the last five years because there are new players in the market. And we’re loving this.
We love to start fresh with customers. We are always on the lookout for those newcomers in eCommerce because the best the most exciting part is to build a solution with them.
How do you see last-mile deliveries further evolve?
There’s a limit to what speed can do. Last-mile delivery will be about developing extra convenience. Pickup spots and lockers will become more common and convenient. Today, many companies are putting up these boxes so customers can pick collect their items at their convenience. In many cities, governments are driving this initiative, as it’s sustainable and cost-efficient. For instance, Saudi Post is putting up these lockers across the cities. So, our role is to partner with all of them. However, we’re going to be completely agnostic, so customers have the choice of how they want their items delivered. We’re very flexible. At the end of the day, customer is king.
With regards to sustainable measures, there’s a lot of discussion going on with city planners and governing bodies on optimizing infrastructure for deliveries and making it safer for delivery bikes. Then there’s the electrification of the supply chain – both on the ground and in the air, whether it’s hybrid vehicles or drone deliveries. We’re going to see a lot happen in this space.
What are some of the challenges you currently face?
The biggest issue we are facing is eCommerce returns and refunds, which is also an opportunity for us. Cash On Delivery has been a pain point for a lot of merchants as the return rate is high, but once we get past the trust factor, customers start using their cards to make payments. Customer confidence is critical. The point is not to make them go away. The return and refund policy is to make it more ubiquitous and more efficient. So that the percentage drops. While reserve logistics is a challenge, once it’s handled properly it can be done efficiently.
Another challenge is last-mile delivery itself. In the supply chain, last-mile deliveries are the most complex part of the business, and probably about 50% of the cost of bringing something from origin to destination. As mentioned earlier, the locker system is one of the solutions and the other is to club together orders for delivery. It’s being worked upon and soon we’ll see the best possible solution.
Health and safety are a constant challenge. There are a lot of good ideas out there to make it safe for the drivers. For us, it’s very important that customers see us as an employer of choice as we try our best to make it safe for our delivery agents out there.